On 24 April, the Competition Authority was notified of the acquisition by Malbikunarstöðvarinnar Hlaðbæjar-Colas hf. (MHC) of certain assets of Drafnarfell ehf. MHC is the country's largest asphalt paving company, engaged in the import, production and laying of asphalt. Drafnarfell is a contracting company that specialises in asphalt milling. MHC has been Drafnarfell's largest customer but has not itself undertaken asphalt milling until now.
During the proceedings, the Competition Authority sought the views of the companies' competitors and their largest customers. Comments from certain stakeholders raised concerns that the merger could enable MHC to use its strong position in the asphalt markets to exclude other competitors from surfacing services in cases where all elements of asphalt paving projects are tendered out separately.
The Competition Authority shared the parties' concerns about these potential harmful vertical effects of the merger on competition. Following the presentation of this preliminary assessment to the merging parties, they proposed conditions to address these effects of the merger. Following discussions and a consultation process, the merging parties entered into an appended settlement with the Authority, in which they committed to comply with conditions in their business activities intended to ensure competitors' access to milling services on competitive terms.
The merger investigation concluded on 26 June 2020. A decision setting out the detailed reasons for the case's outcome will be published on the Competition Authority's website shortly.
Settlement, dated 22 June 2020.
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